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82 CHAPTER 4


earn a relatively large share of their incomes from rice production (28 percent compared to 21 percent and 17 percent for medium and large farms, respec- tively) and from “other crops.” Large-scale farms earn a relatively large share of their incomes from wheat and cotton and from crops in general. Livestock and fruit and vegetable income seem to be more important among medium- sized farms. These results highlight the fact that small farmers should not be considered synonymous with poor rural households, particularly in a country where agroecological potential and cropping intensity vary widely.


Household Consumption Patterns Table 4.9 reports average household consumption expenditures and patterns for different types of households. At the national level, the per capita consump- tion expenditure is LE 1,783 per year.6 Household decisions on the allocation of resources to food spending and other needs have widespread implications for well-being. The food share in total household budgets at the national level is 57 percent. Urban and nonfarm households spend lower proportions of their total expenditures on food consumption (about 53 percent), while rural and farm households spend a larger share on food (62–64 percent). The results are consistent with the international patterns, whereby low-income house- holds spend a larger share of their budgets on food while richer households spend a larger portion on nonfood items. Food, clothing, and footwear appear to be necessities in the sense that their budget shares decline as income rises, while education, health, recreation, and other things are luxuries in the sense that their budget shares rise with income.


It is interesting to note that the food consumption patterns are not closely related to the crops grown. For example, wheat farmers do not consume more wheat products, and rice farmers consume no more rice than other farmers. This is a sign of the relatively commercial orientation of Egyptian farmers and relatively low transaction costs, presumably due to the high population density in settled areas. It is further supported by the fact that almost all farmers are either net buyers or net sellers; few produce only for their own consumption without buying or selling.


The Impact of Commodity Price Changes on Poverty To understand the effects on household incomes and poverty on agricultural price changes, we simulated the effect for several crops that are important in


6 The estimated consumption expenditure in the Egypt Integrated Household Survey is greater than the estimated net income. This is a common pattern in household survey data and is probably caused by underreporting of income. In the analysis that follows, we assume that the composition of income is accurate, implying similar levels of underreporting for different types of income.


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